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China made a “real mistake” by threatening to cut off the global supply of rare-earth metals and magnets, US Treasury Secretary Scott Bessent has said, claiming the move has forced the US and its allies to speed up efforts to secure alternative sources.
In an interview published by The Financial Times on Friday, Bessent said China had drawn global attention to its willingness to use critical minerals as leverage.
“China has alerted everyone to the danger. They’ve made a real mistake,” he said.
“It’s one thing to put the gun on the table. It’s another thing to fire shots in the air.”
Chinas has now announced it will suspend its new restrictions on rare-earth elements for a year, following the meeting between President Trump and Chinese premier Xi Jinping in South Korea. The restrictions were brought in last month as the US and China continued to trade tit-for-tat measures as part of their ongoing trade war.
“I think the Chinese leadership were slightly alarmed by the global backlash to their export controls,” Bessent told The Financial Times.
Bessent said the new agreement will stabilize relations in the short term, but in the medium-to-long term, China’s ability to squeeze the global supply of critical minerals and products used in industry would diminish.
“There’s an agreement that, ceteris paribus [all things being equal], we have reached an equilibrium, and we can operate within that equilibrium over the next 12 months,” Bessent said.
“I don’t think they’re able to do it now because we have offsetting measures.”
The US is now diversifying its supply chain through new mining and refining operations in Southeast Asia and Australia.
China first began using its control of rare-earth mining and production as a weapon during a trade dispute with Japan in 2010. The move caused widespread alarm in the manufacturing sector.
As The Epoch Times explains, “The rare earths sector remains one of the world’s most concentrated supply chains, with China dominating approximately 70 percent of global production and a significantly larger share of processing capacity.
“Starting in 2023, China began imposing export restrictions on strategic materials to the United States, including substances like antimony, germanium, and tungsten. This prompted the Select Committee on the Strategic Competition between the United States and the Chinese Communist Party to release a report recommending that Congress incentivize domestic production of rare earth element magnets, which are the key end-use for rare earth elements.”
In his second term, President Trump has made regaining control over strategic resources a top priority. He has brought in measures to fast-track permits for domestic production and pledge hundreds of millions of dollars to support US producers.
In October, Secretary Bessent warned that, although the US did not want to sever trade ties entirely with China over rare-earth minerals, the US and its allies would be forced to “decouple” if China “wants to be an unreliable partner to the world.”
